[ANALYSIS] How To Make Money Investing With Latte’s (0.89%-374.25%)

I love my coffee. Espresso is even better.

Coffee is the by far the highest selling legal drug in the world with coffee exportation grossing $20 Billion in world-wide capitalization per year alone. [0.5] But, what if we could clean up our mentality and our wallets by shifting the same spending on lattes to investing? Maybe we could take some caffeinated stress off our adrenal glads and shift that energetic power to super-charge our future net-worth.

The story is a friend of mine made a comment in passing that he lives by the “latte investing strategy.” As simple(and slightly sophisticated)this sounded, I was incredibly curious for him to expand on how this strategy worked. It’s simple: Instead of purchasing lattes, you invest the same amount of money that you’d normally spend on a latte in the stock market.

I asked him if this was profitable or not. This was his answer: The power of compounding will astound you.

I took the initiative to dive into the numbers and just see how well this would work.

This will break down any excuses or preconceived notions that you may have had regarding the difficulties of investing.

Below, you are going to find a comprehensive analysis that breaks down how investing the price of a latte over 10, 20, 30, and 40 years can make you a substantial amount of money.

You have the power. Take a look:


Reference Key

Latte – Grande – $3.65 [1]

$3.65 x 4 days a week = $14.60 per week

$14.60 x 4 weeks in a month = $58.40 per month

Average 30-year interest rate on the stock market: 8.6% [2]

Compounded interested calculated via Investor.gov


10 Years Compounded

-Shoebox Savings: 0% = $7,008

-Traditional Savings: 0.06%[3] = $7,030.62 / +$22.62 (+0.32%)

-Stock Market: 6.8% [4] = $9,589.63 / Shoebox: +$2,581.63 (+36.84%) Trad. Savings: +$2,559.01 (+36.40%)

screen-shot-2016-12-09-at-1-00-14-am


20 Years Compounded

-Shoebox Savings: 0% = $14,016

-Traditional Savings: 0.06%[3] = $14,099.87 / +$83.87 (+0.60%)

-Stock Market: 6.8% [4] = $28,123.55 / Shoebox: +$14,107.55 (+100.65%) Trad. Savings: +$14,023.68 (+99.46%)

screen-shot-2016-12-09-at-1-05-12-am


30 Years Compounded

-Shoebox Savings: 0% = $21,024

-Traditional Savings: 0.06%[3] = $21,211.65 / +$197.65 (+0.89%)

-Stock Market: 6.8% [4] = $63,889.44 / Shoebox: +$42,865.44 (+203.89%) Trad. Savings: +$42,677.79 (+201.20%)

screen-shot-2016-12-09-at-1-06-14-am


40 Years Compounded

-Shoebox Savings: 0% = $28,032

-Traditional Savings: 0.06%[3] = $28,366.22 / +$334.22 (+1.19%)

-Stock Market: 6.8% [4] = $132,942.28/ Shoebox: +$104,910.28 (+374.25%) Trad. Savings: +$104,576.06 (+368.66%)

screen-shot-2016-12-09-at-1-07-28-am


Takeaways

  1. If you have money to spend on coffee, you have money to lose that you didn’t know you could make by investing it.
  2. The money is the same, just a different title; A. Latte $3.65 Investment $3.65.
  3. There is no excuse as to if you have enough money or enough time. You can make money by investing, regardless.
  4. Einstein was right: Compounding is the eighth wonder of the world.
  5. You hold the power every time you decide what to do with your money. You can do either; throw your money down the drain(literally via coffee)or you can wake up tomorrow with more money available to you.
  6. There is a visual and definite “critical mass” in the time of the investment duration when the capital appreciation spikes dramatically to offer up massive growth after a dedicated duration of consistent investing.
  7. If you value your money, you stand to gain more by not purchasing latte’s but instead, investing it.
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